2014 was the Year of the Buyer
For the first time in many years, 2014 was the year where buyers had choice, with multiple ‘Super Saturdays’ and strong clearance rates.
Unlike markets of the past, where we saw vendor expectations starting to exceed the market, for the most part this year the buyers were leading the way – hence the Year of the Buyer.
A recent example was 199 Burke Road, Glen Iris sold before Christmas by John Manton, Marshall White, where an offer of $1,500,000 was put to the vendors. After being advised that it was at an acceptable level to sell before auction, the other buyers were also notified and advised to attend an early ‘auction’ that evening (the Thursday before the scheduled Saturday auction).
Four other parties attended the property that evening and bid, the final price in excess of $1,800,000. Resulting in an extra $300,000 more than the price the vendor was happy to sell at. And this property wasn’t without some concerns. Although a very convenient location, the home was on a busy road, opposite a school and, for many, requiring further improvements.
Why is this relevant? Because the buyers led the way, numbers continued to exceed expectations at both open for inspections and auctions with the average number of bidders fighting for properties over $1million sitting comfortably at 2 bidders per auction* Clearance rates for these properties averaged around 70% for the year. Even the 25th October, where we saw over 250 homes auctioned over $1million, wasn’t enough to affect the average number of bidders.
With the Reserve Bank cash rate stable for the last 12 months at 2.5%*, this is adding to buyer confidence.
For sellers, this means that if they are willing to be commercial, there is a more than reasonable chance they will sell their property.
For buyers, however, it means competition, higher prices, potentially missing out on the right home or buying the wrong one. A greater market knowledge and understanding of prices, which includes working through values – both the emotional and financial, may help you buy better.
The New Year is a time where many families plan their next 12 months. Whether it be buying, selling or both. Last years data suggests there are still many unsatisfied buyers already waiting for the new stock to present. If this is the case, it may be reasonable to expect that many of the homes scheduled for auction in late February could sell beforehand.
How will you ensure you don’t miss out on the property you want and at the same time protect your privacy, gather information and be prepared?